U.S. livestock: CME cattle futures sag after USDA data

Chicago | Reuters — Chicago Mercantile Exchange live cattle futures declined on Monday, pressured by technical selling and bearish data in a monthly U.S. Department of Agriculture report released on Friday, traders said.

USDA late on Friday reported the number of U.S. cattle on feed as of Sept. 1 at 11.125 million head, up six per cent from a year ago. Analysts polled by Reuters expected 5.4 per cent more cattle in feedlots.

Placements of cattle into feedlots for fattening during August totaled 2.07 million head, seven per cent more than a year ago and above analyst predictions for a 4.4 per cent gain.

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After the close on Monday, USDA’s monthly cold storage report showed total frozen beef supplies as of Aug. 31 at 503.4 million pounds, a record high for the month.

A few analysts had expected USDA to show, on average, 483.9 million lbs. of beef.

“We had a bearish Cattle on Feed report; that hit the market here today. We just got in a moderately bearish cold storage report as well for beef. I think we had a small one-two punch in the cattle market,” said Rich Nelson, chief strategist for Illinois-based Allendale Inc.

Another trader said Friday’s cattle-on-feed report pressured a live cattle futures market that was technically overbought and ripe for a setback.

CME October live cattle futures settled 0.9 cent lower at 112.175 cents/lb. and most-active December ended down 1.45 cents at 117 cents (all figures US$). CME October feeder cattle were down 1.775 cents, at 156.3 cents/lb.

Lean hog futures settled mixed, with the most-active December contract ending lower and other months settling higher.

USDA late on Monday reported total frozen pork supplies at the end of August at 582.6 million lbs. A few analysts had expected USDA to show, on average, 558.9 million lbs. of pork.

Stocks of pork bellies, at 34.969 million lbs., were down 14 per cent from last month, USDA said, but up 82 per cent from last year.

October hogs settled up 0.7 cent, to 61 cents/lb., while December hogs ended down 0.425 cent at 56.975.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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